The predecessor of WTO is General Agreement on Tariffs and Trade (GATT). WTO is an International body dealing with the rules of trade among states and separate customs territories. The agreements in WTO provide the legal ground-rules for international trade and commerce. They are mainly contracts, binding governments to conduct their trade and trade policies according to principles and rules. Although negotiated and signed by governments, the goal is to help producers of goods and services, exporters and importers over the Globe and bringing them under one roof.
The International body has over 148 members as on October 13,2004 accounting for 90% of the world trade and around 30 others are negotiating membership and are WTO observers.
Members of the WTO include:
The WTO was founded with the purpose of liberalizing international trade. Its aim was to help member nations reach cordial solutions to their trade-related problems.
The main principles of WTO are:
Objectives of the WTO
With manifold objectives like helping trade flow smoothly, freely, fairly and predictably it has become capable of organizing trade and commerce over the Globe through the mantra of liberalization, privatization and globalization. It is stepping forward with objectives like:
1) Rejecting all forms of protectionism.
2) Removing trade barriers and eliminating discriminatory treatment in international trade through successive multilateral trade negotiations.
3) Providing a fair, predictable and open rule-based trading system through overseeing the implementation of multilateral trade rules and enforcing legally binding obligations.
4) Providing a mechanism for settling trade disputes.
5) Integrates developing and least developed economies into the world trading system.
All important decisions are made by the Ministerial Committee which meets every two years. Trade disputes are resolved by the WTO through negotiations. In case any nation puts up trade barriers in the guise of customs duty against another country or for a specific good, the WTO can issue trade related sanctions against the violating country.
Two basic functions of the WTO are:
The activities of WTO are managed by a Ministerial Conference that is held once in two years.
WTO is run by its member nations. Decisions are taken by consensus among entire member nations.
The WTO's top-level decision-making body is the ministerial conference, which meets at least once in every two years.
Below this is the general council (normally represented by ambassadors and heads of delegation in Geneva, but sometimes officials sent from members' capitals), which meets several times a year in Geneva. The General Council also meets as the Trade Policy Review Body and the Dispute Settlement Body.
At the next level there are three Councils each handling a different broad area of trade - the Council for Trade in Goods (Goods Council), the Council for Trade in Services (Services Council), and the Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS Council).
There are also specialized committees, working groups and working parties dealing with the individual agreements and other areas such as the environment, development, membership applications and regional trade agreements. They regularly report to the General Council, Goods Council and Services Council as appropriate.
The WTO secretariat in Geneva has around 600 staffs and is headed by a director general. The WTO Secretariat's main duties are to provide administrative support for the running of the system.
The WTO has several achievements as listed below:
The WTO faces considerable challenges as listed below: